5 ms·

Pray tell why bitcoin is inevitable as opposed to the gold standard :)

anonporridge 5y ago
Well, if you had to pick one to build a standard on in the modern world, I'd certainly pick bitcoin. Unlike gold, bitcoin is a network protocol available to anyone on the planet with an internet connection, can be programmed and improved, and you can secure in a way such that it's impossible to steal through simple violence. But obviously gold or bitcoin is a false dichotomy.
- imwillofficial 5y ago
  “Impossible” Meet “Beat him with this $5 hammer until he gives up the keys”
  - anonporridge 5y ago
    It's possible to create N of M multi sig keys held by multiple people, making it literally impossible for any one person to comply with coercion. And the more important point is that while yes, you can still use violence, the violence becomes more complicated and costly. This is unlike the situation with gold where you can break into my house, shoot me in the head, and carry away my gold. With bitcoin, you need to negotiate with my mind to acquire my consent, even if that negotiation is torture.
  - bugzz 5y ago
    Many ways to deal with this. 1) fake wallets (give them a key to some coins but not all) 2) multisig - someone else has to provide the other half of the key or what you can give them is worthless etc
  - randomhodler84 5y ago
    That is just the key access problem. You can’t beat a time locked multisig out of a guy. There are systems to protect key materials against violence. It’s kinda an old art in the military. You can break into a multi-keyed vault of gold given enough time. You will not break multisig ECDSA with all the computers on earth.
    - trinovantes 5y ago
      If you have all the computers in the world, you can just create a dominate fork of the blockchain and own all the coins
      - randomhodler84 5y ago
        That is not how it works. Even if you could usurp all the mining powers, the Coins are still owned by the keys. You only have the ability to censor future transactions. Mining controls the future, key holders control the past.
        trinovantes 5y ago
        You control future transactions with majority computing power i.e. double spend coins
        anonporridge 5y ago
        Double spend your coins only. And even then, you wouldn't because doing this kind of attack would destroy the value of the network and all your investment in mining ASICs would be destroyed. Here's how it goes, https://www.youtube.com/watch?v=CjyJhKpLUBU https://www.youtube.com/watch?v=CjyJhKpLUBU
        trinovantes 5y ago
        This discussion is originally about comparing bitcoin to gold. OP is saying bitcoin's security is equivalent to the underlying crypto protocols which is clearly false as there is a finite amount of computers on Earth to render it worthless. Nation states don't bother attacking bitcoin because there's little payoff relative to the cost. However, if we suppose there's a hostile country that held their central bank reserves in bitcoin, wouldn't that make a compelling case for the US government to invest in such infrastructure so that they can cripple them like they did with Russia?
- deleted 5y ago
  [deleted]
javert 5y ago
I don't think it's inevitable, but bitcoin can be audited and transferred immensely more easily than gold. The fact that historically, foreign countries kept gold in vaults in the US, speaks to this. Also, gold gets mined at a faster rate when its value goes up. In that sense, bitcoin is a "harder" money. There's also the possibility of people mining gold from asteroids, which could destroy the scarcity and value of gold.
- recuter 5y ago
  I suppose some sort of organization that audits gold reserves would have to be invented or whatever to do that difficult job. You know, for the time being, just until the astroid mining suddenly kicks in.
eru 5y ago
And why bitcoin, and not dogecoin or ethereum?
- randomhodler84 5y ago
  Ethereum no, cos you can’t run a node, your just trusting an RPC provider. Same with the rest of the EVMs and other smart contracts platforms. Dogecoin you can but it’s much much smaller in terms of ownership. Brokers and exchanges hold a lot of it.
- kayamon 5y ago
  Their blockchains are shorter. Longest blockchain always wins in the long term -- that was proven in the Bitcoin paper.
  - eru 5y ago
    Which Bitcoin paper are you talking about? (Do you mean the original white-paper that introduced bitcoin?) I'd be very curious about any such proof comparing different crypto-currencies. I can't imagine how that one would work. Do you mean a mathematical proof?
    - kayamon 5y ago
      Yes, in the original bitcoin paper. The blockchain with the longest proof of work is always the real one, given multiple competing blockchains. That’s literally the whole point of blockchains. It’s like Highlander, there can only be one.
      - eru 5y ago
        That's not a proof in the paper. That's a definition of how the system is works. And it's only part of the procedure for how to choose between different competing capital-B Bitcoin chains. It doesn't say anything about comparing different coins.
kayamon 5y ago
I suspect this isn't a good-faith question, but I'll attempt an answer at least: Bitcoin's game theory creates a system for agreeing on a worldwide price for energy in a way that self-regulates, as opposed to relying on people like OPEC to price-fix the energy market. It works by effectively selecting a random power plant on the planet, every 10 minutes, and kinda asking them to vote on how best to use their energy. Either they're mining Bitcoin and might be the lucky winner, or they're instead selling that energy locally for some more productive purpose. This forms a comparison function, like in a quicksort. Each power plant is voting with their wallet as to whether their local energy price is more important than the global one. As a results it's as-if you've created a kind of futures market for energy prices that requires no centralized governing body. The net effect is that the price of energy is shifted back and forward, like a tug-of-war. The final result is somewhat akin to an iterative solver. The entire world energy economy is now being controlled by an algorithm, something that's never been attempted before like this. It's been running 13 years now, and gains more weight as the value being thrown around increases. The energy market is tumbling wildly around right now as most people (a) have no idea any of this is happening, and (b) can't really stop it. In the end the ultimate goal is settling on a solution where all parties in the game achieve consensus on the true price of assets, something that humanity has never had before in its history. The idea of energy=money is an important development that, while people today seem to refuse to try and get their heads around, will ultimately change the world.
- vba616 5y ago
  >The idea of energy=money is an important development that, while people today seem to refuse to try and get their heads around, will ultimately change the world. If you really believe this, it would help if you could spare the time to refute people, like me, who currently believe it's a huge step backwards, even more than that, a kind of self-sustaining cancer, the vanguard of the "grey goo scenario" people talk about. The Landauer limit is supposed to be a lower bound on the energy that has to be dissipated to flip a single bit. It's something like 1e-26 watt hours. That (minus a few powers of 10) what you fundamentally have to use to write down a number that you call money, whether it's $1 or $1 trillion. It's not an easy thing to ensure that writing those numbers down is regulated, but it's clearly doable and in no way requires overhead on the order of the money supply. With Bitcoin, though, creating $1 trillion will always cost $1 trillion even in the far future where we perhaps run computers at the Landauer limit or harness entire galaxies for power. If a galaxy costs $1 trillion, then you have to destroy a galaxy to represent the abstract value of the other one. It appears, to me, to be a recreation of the disadvantages of mining precious metal for money, in such a way as to potentially consume the entire universe (insofar as humans ever get access to it). The more advanced energy production is, the more will be consumed to make the same amount of money. This is not just bad, it's existentially horrifying (for some people) and it's more disturbing to see advocates of PoW ignore this. Because, what is it that you're thinking? Something being an algorithm doesn't mean it's a good algorithm. Even if there is a clever argument for why it's good in some abstract sense. See: https://en.wikipedia.org/wiki/Galactic_algorithm https://en.wikipedia.org/wiki/Galactic_algorithm There's a passage in a book by Douglas Adams that I'm reminded of, even though it isn't quite the same: "“How can you have money,” demanded Ford, “if none of you actually produces anything? It doesn't grow on trees you know.” “If you would allow me to continue.. .” Ford nodded dejectedly. “Thank you. Since we decided a few weeks ago to adopt the leaf as legal tender, we have, of course, all become immensely rich.” Ford stared in disbelief at the crowd who were murmuring appreciatively at this and greedily fingering the wads of leaves with which their track suits were stuffed. “But we have also,” continued the management consultant, “run into a small inflation problem on account of the high level of leaf availability, which means that, I gather, the current going rate has something like three deciduous forests buying one ship’s peanut." Murmurs of alarm came from the crowd. The management consultant waved them down. “So in order to obviate this problem,” he continued, “and effectively revalue the leaf, we are about to embark on a massive defoliation campaign, and. . .er, burn down all the forests. I think you'll all agree that's a sensible move under the circumstances." The crowd seemed a little uncertain about this for a second or two until someone pointed out how much this would increase the value of the leaves in their pockets whereupon they let out whoops of delight and gave the management consultant a standing ovation. The accountants among them looked forward to a profitable autumn aloft and it got an appreciative round from the crowd.”" You might say "oh, this is a story of fiat currency" and perhaps it was intended that way, as the story predated cryptocurrency. But the "burn the forests down" is what strikes a chord with me.

Well, if you had to pick one to build a standard on in the modern world, I'd certainly pick bitcoin. Unlike gold, bitcoin is a network protocol available to anyone on the planet with an internet connection, can be programmed and improved, and you can secure in a way such that it's impossible to steal through simple violence. But obviously gold or bitcoin is a false dichotomy.

imwillofficial 5y ago
“Impossible” Meet “Beat him with this $5 hammer until he gives up the keys”
- anonporridge 5y ago
  It's possible to create N of M multi sig keys held by multiple people, making it literally impossible for any one person to comply with coercion. And the more important point is that while yes, you can still use violence, the violence becomes more complicated and costly. This is unlike the situation with gold where you can break into my house, shoot me in the head, and carry away my gold. With bitcoin, you need to negotiate with my mind to acquire my consent, even if that negotiation is torture.
- bugzz 5y ago
  Many ways to deal with this. 1) fake wallets (give them a key to some coins but not all) 2) multisig - someone else has to provide the other half of the key or what you can give them is worthless etc
- randomhodler84 5y ago
  That is just the key access problem. You can’t beat a time locked multisig out of a guy. There are systems to protect key materials against violence. It’s kinda an old art in the military. You can break into a multi-keyed vault of gold given enough time. You will not break multisig ECDSA with all the computers on earth.
  - trinovantes 5y ago
    If you have all the computers in the world, you can just create a dominate fork of the blockchain and own all the coins
    - randomhodler84 5y ago
      That is not how it works. Even if you could usurp all the mining powers, the Coins are still owned by the keys. You only have the ability to censor future transactions. Mining controls the future, key holders control the past.
      - trinovantes 5y ago
        You control future transactions with majority computing power i.e. double spend coins
        anonporridge 5y ago
        Double spend your coins only. And even then, you wouldn't because doing this kind of attack would destroy the value of the network and all your investment in mining ASICs would be destroyed. Here's how it goes, https://www.youtube.com/watch?v=CjyJhKpLUBU https://www.youtube.com/watch?v=CjyJhKpLUBU
        trinovantes 5y ago
        This discussion is originally about comparing bitcoin to gold. OP is saying bitcoin's security is equivalent to the underlying crypto protocols which is clearly false as there is a finite amount of computers on Earth to render it worthless. Nation states don't bother attacking bitcoin because there's little payoff relative to the cost. However, if we suppose there's a hostile country that held their central bank reserves in bitcoin, wouldn't that make a compelling case for the US government to invest in such infrastructure so that they can cripple them like they did with Russia?
deleted 5y ago
[deleted]

javert 5y ago

I don't think it's inevitable, but bitcoin can be audited and transferred immensely more easily than gold. The fact that historically, foreign countries kept gold in vaults in the US, speaks to this. Also, gold gets mined at a faster rate when its value goes up. In that sense, bitcoin is a "harder" money. There's also the possibility of people mining gold from asteroids, which could destroy the scarcity and value of gold.

recuter 5y ago
I suppose some sort of organization that audits gold reserves would have to be invented or whatever to do that difficult job. You know, for the time being, just until the astroid mining suddenly kicks in.

eru 5y ago

And why bitcoin, and not dogecoin or ethereum?

randomhodler84 5y ago
Ethereum no, cos you can’t run a node, your just trusting an RPC provider. Same with the rest of the EVMs and other smart contracts platforms. Dogecoin you can but it’s much much smaller in terms of ownership. Brokers and exchanges hold a lot of it.
kayamon 5y ago
Their blockchains are shorter. Longest blockchain always wins in the long term -- that was proven in the Bitcoin paper.
- eru 5y ago
  Which Bitcoin paper are you talking about? (Do you mean the original white-paper that introduced bitcoin?) I'd be very curious about any such proof comparing different crypto-currencies. I can't imagine how that one would work. Do you mean a mathematical proof?
  - kayamon 5y ago
    Yes, in the original bitcoin paper. The blockchain with the longest proof of work is always the real one, given multiple competing blockchains. That’s literally the whole point of blockchains. It’s like Highlander, there can only be one.
    - eru 5y ago
      That's not a proof in the paper. That's a definition of how the system is works. And it's only part of the procedure for how to choose between different competing capital-B Bitcoin chains. It doesn't say anything about comparing different coins.

kayamon 5y ago

I suspect this isn't a good-faith question, but I'll attempt an answer at least: Bitcoin's game theory creates a system for agreeing on a worldwide price for energy in a way that self-regulates, as opposed to relying on people like OPEC to price-fix the energy market. It works by effectively selecting a random power plant on the planet, every 10 minutes, and kinda asking them to vote on how best to use their energy. Either they're mining Bitcoin and might be the lucky winner, or they're instead selling that energy locally for some more productive purpose. This forms a comparison function, like in a quicksort. Each power plant is voting with their wallet as to whether their local energy price is more important than the global one. As a results it's as-if you've created a kind of futures market for energy prices that requires no centralized governing body. The net effect is that the price of energy is shifted back and forward, like a tug-of-war. The final result is somewhat akin to an iterative solver. The entire world energy economy is now being controlled by an algorithm, something that's never been attempted before like this. It's been running 13 years now, and gains more weight as the value being thrown around increases. The energy market is tumbling wildly around right now as most people (a) have no idea any of this is happening, and (b) can't really stop it. In the end the ultimate goal is settling on a solution where all parties in the game achieve consensus on the true price of assets, something that humanity has never had before in its history. The idea of energy=money is an important development that, while people today seem to refuse to try and get their heads around, will ultimately change the world.

vba616 5y ago
>The idea of energy=money is an important development that, while people today seem to refuse to try and get their heads around, will ultimately change the world. If you really believe this, it would help if you could spare the time to refute people, like me, who currently believe it's a huge step backwards, even more than that, a kind of self-sustaining cancer, the vanguard of the "grey goo scenario" people talk about. The Landauer limit is supposed to be a lower bound on the energy that has to be dissipated to flip a single bit. It's something like 1e-26 watt hours. That (minus a few powers of 10) what you fundamentally have to use to write down a number that you call money, whether it's $1 or $1 trillion. It's not an easy thing to ensure that writing those numbers down is regulated, but it's clearly doable and in no way requires overhead on the order of the money supply. With Bitcoin, though, creating $1 trillion will always cost $1 trillion even in the far future where we perhaps run computers at the Landauer limit or harness entire galaxies for power. If a galaxy costs $1 trillion, then you have to destroy a galaxy to represent the abstract value of the other one. It appears, to me, to be a recreation of the disadvantages of mining precious metal for money, in such a way as to potentially consume the entire universe (insofar as humans ever get access to it). The more advanced energy production is, the more will be consumed to make the same amount of money. This is not just bad, it's existentially horrifying (for some people) and it's more disturbing to see advocates of PoW ignore this. Because, what is it that you're thinking? Something being an algorithm doesn't mean it's a good algorithm. Even if there is a clever argument for why it's good in some abstract sense. See: https://en.wikipedia.org/wiki/Galactic_algorithm https://en.wikipedia.org/wiki/Galactic_algorithm There's a passage in a book by Douglas Adams that I'm reminded of, even though it isn't quite the same: "“How can you have money,” demanded Ford, “if none of you actually produces anything? It doesn't grow on trees you know.” “If you would allow me to continue.. .” Ford nodded dejectedly. “Thank you. Since we decided a few weeks ago to adopt the leaf as legal tender, we have, of course, all become immensely rich.” Ford stared in disbelief at the crowd who were murmuring appreciatively at this and greedily fingering the wads of leaves with which their track suits were stuffed. “But we have also,” continued the management consultant, “run into a small inflation problem on account of the high level of leaf availability, which means that, I gather, the current going rate has something like three deciduous forests buying one ship’s peanut." Murmurs of alarm came from the crowd. The management consultant waved them down. “So in order to obviate this problem,” he continued, “and effectively revalue the leaf, we are about to embark on a massive defoliation campaign, and. . .er, burn down all the forests. I think you'll all agree that's a sensible move under the circumstances." The crowd seemed a little uncertain about this for a second or two until someone pointed out how much this would increase the value of the leaves in their pockets whereupon they let out whoops of delight and gave the management consultant a standing ovation. The accountants among them looked forward to a profitable autumn aloft and it got an appreciative round from the crowd.”" You might say "oh, this is a story of fiat currency" and perhaps it was intended that way, as the story predated cryptocurrency. But the "burn the forests down" is what strikes a chord with me.